March 29, 2013

Why Are People with Health Insurance Going Bankrupt?

Dr. Margaret Flowers and Kevin Zeese: Obama care will not put an end to
medical bankruptcies - 80% of people going bankrupt due to healthcare
costs had insurance

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biography

Dr. Margaret Flowers is a pediatrician in the Baltimore area and a co-chair of the Maryland chapter of Physicians for a National Health Program (PNHP). She is also a Co-Director of PopularResistance.org and It's Our Economy. Flowers is currently running as a Green Party candidate for US Senate in the state of Maryland.

Kevin Zeese is co-director of PopularResistance.org and It's Our Economy, an organization that advocates for democratizing the economy. He's also an attorney who is one of the original organizers of the National Occupation of Washington, DC. He has been active in independent and third party political campaigns including for state legislative offices in Maryland, governor of California and U.S. president, where he served as press secretary and spokesperson for Ralph Nader in 2004. He ran for the U.S. Senate in 2006 and was the only person ever nominated by the Green Party, Libertarian Party and Populist Party.

JAY: So tell us now. You have been critical about this from the beginning. You were for single-payer during the health-care debate. But now it's passed. It's starting to be implemented. You have a better idea what it is. So how's it looking?

FLOWERS: Right. Well, it's looking pretty much like what we expected. Right now the United States is the only industrialized wealthy nation that has a market-based health care system, and the Affordable Care Act moved us further in the direction of a market-based health care system by requiring people who don't qualify for the public programs to purchase private health insurance. That will be going into effect. The exchanges where people will buy that insurance roll out in October of this year. By JanuaryÂ 2014, people have to have insurance or face a penalty.

But what we're seeing in terms of the type of insurance that people are going to be offered and the trends of what people are actually purchasing right now is we're moving more in the direction of what we call underinsurance, where people may have an insurance plan, but there are significant financial barriers to getting actual care and significant financial risks if someone has a serious accident or illness.

JAY: [crosstalk]

FLOWERS: Well, what we see, it's interesting. Over the last threeÂ years there's been a slowing in the rate of rise of our health-care spending in this country, and it was interesting 'cause the president said in his State of the Union address, oh, the Affordable Care Act is already working; we're seeing our costs slowing. But the actual data shows that our costs are slowing because people are using less health services. The copays and the deductibles that they face mean that they don't have the cash in their hand to go and get those health-care services.

And then what we're seeing in terms of bankruptcyÂ—and this is actually based on a study done before the economic crash, based on 2007 dataÂ—was that 62Â percent of our personal bankruptcies were due to medical costs and illness. Almost 80Â percent of those patients had some form of health insurance. If we look at Massachusetts, that's had the same kind of legislation on the state level, the number of medical bankruptcies there is actually rising.

JAY: So why is that? If you have health insurance, why are you going bankrupt?

FLOWERS: Because they don't coverÂ—well, they have co-insurances, so at some level, you know, they cover up to this level, but after that, your co-insurance is 20Â percent, so you have to pay for 20Â percent of the services. They can say that services are uncovered services, and so then you're liable for those. They can restrict the networks.

So an interestingÂ—out in California, Blue Cross Blue Shield out there, that covers the largest number of public employees, dropped Cedars-Sinai and UCLA from their network because that's where people go when they need actual health care. So if you have a serious problem and that's the place that can treat you, you're going to have to hold a bake sale or sell your home or do something so that you can afford that care.

KEVIN ZEESE, CODIRECTOR, IT'S OUR ECONOMY: And Obamacare's going to make this worse, because what Obamacare does is, you know, there's several levels of insurance coverageÂ—90/10, where the insurance company pays 90Â percent, consumer pays 10Â percent; 80/20; 70/30; 60/40. The subsidy provided by Obamacare to people who can't afford insurance will only cover 70/30 plans. So when you get a serious illness, you're paying 30Â percent of the cost of that health care.

Now, what's really bad about this is that prior to Obamacare, some of the state insurance regulators were pushing insurance coverers to a higher level, where they would provide more coverage rather than less. Obamacare has now put it into law that 60/40 is okay and 70/30 is what the government will pay for. And so the 80/20 and 90/10's become less common. So you're going to see more and more people with underinsurance and not going to see lack of insurance completely go away.

In Massachusetts, which is basically the pilot program for ObamacareÂ—Romneycare was the pilot for Obamacare (it's pretty much the same plan)Â—what you see up there is only about half of those people who are without insurance got covered by Romneycare. The same is going to happen here. The Congressional Budget Office is estimating 30Â million or more people will have no insurance when Obamacare is fully implemented. But those who have insurance are going to now be coming with underinsurance.

JAY: And this is all kind of new to me. I mean, viewers of The Real News probably know I'm a dual citizen and I was in Canada until recently, and we don't have any of this, right? It's single, you knowÂ—.

ZEESE: You have a sensible program.

JAY: You have a government health-care plan, and when you're born you get a health card, you show it, and that's kind of the end of it. So now that IÂ—I have not seen this before. The insurance I have down here now, I have a copay, but there'sÂ—I think it's, like, a $3,000 cap. After that, the insurance pays 100Â percent.

FLOWERS: Of covered services. If they say something's not coveredÂ—.

JAY: Okay. But are you saying that some of this, that copay does not have a cap?

FLOWERS: It's not that the copay doesn't have a cap. It's what the insurance companies are able to determine. You know, they'll say that something is not covered, that it's experimental. Or we see this all the time, where they actually charge people for things that are in their plan that they shouldn't be paying for. And if you're not savvy enough to understand that your plan covers that service and then fight for itÂ—.

[snip] before 2005, I think, looking at our Blue Cross program here. And what they found was that about one out of every five claims was denied just randomly. Like, if five claims come in, they just pull one out and say, we're not paying this one. And it wasn't based on any rationality. It was just a way of, you know, being able to get more money.

And we have evidence of this in New York from people that worked in these claims offices that if there was a certain level area of the city, lower-income area, they would deny those claims because they knew people didn't have the resources to fight back.

JAY: [crosstalk] go back to my example, we hadÂ—I think it's an 80/20. So our copayÂ—

ZEESE: That's good coverage in the United States.

JAY: Â—wasn't so terrible. But, I mean, the final bill had to be in the realm of close to $300,000. If it had been a 60/40, we would have been toast.

FLOWERS: Yeah. Yeah.

ZEESE: Exactly right.

FLOWERS: And the other thing with that is if your babies were born in December and you met that whole, you know, what your out-of-pocket costs were in December and January, you start all over again. And that's where some families just can't handle that.

ZEESE: And that's what they're finding in Massachusetts is they're finding that with Romneycare, which was, as I said, the pilot program for Obamacare, they're seeing that people are not going to get health care when they need it, because they know when they go it's coming out of their pocket. And that's not a good thing. When you put off the necessary health care, what that results in is a bigger bill later. You know, if someone's having a problemÂ—.

FLOWERS: Or a worse outcome.

ZEESE: Or a worse outcome, or, yeah, youÂ—.

FLOWERS: You can't work 'cause you're disabled now.

ZEESE: Yeah. So it gets more costly by not taking care of the problem at the initial stage. You let it grow and get bigger until you have no choice but to face it. And so in Massachusetts they're finding bankruptcies are continuing at the same level. They're finding only half the people that were uncovered are now covered. And they're finding those who are covered are not getting health care that they need. That's not the kind of health-care system we should have in the United States.

FLOWERS: Costs are rising.

ZEESE: It's not appropriate.

JAY: So where are we at with this, then, in terms of the politics of this? Is there any chance this debate gets reopened in the next two, threeÂ years?

FLOWERS: That's really up to the people, whether we force it to be opened or not.

I mean, it's interesting right now that you have, you know, more kind of these articles coming out in Time magazine looking at our health-care system. And I'm not really sure what's behind that right now, unless they're trying to maybe win the argument by creating it early and, you know, not allowing us to make that argument.

But I think what we're going to see over the next couple of years is we're going to see continued rise in our health-care costs, continued poor outcomes, families continuing to face financial barriers to care and bankruptcy. And it's up to us to start saying that, you know, these things are not okay and that there is a real solution. We'd like to join the rest of the civilized world and have a publicly financed health care system.

ZEESE: And just to answer your question a little more, there are people in the country who are working on this.

FLOWERS: Absolutely.

ZEESE: There are. And more and more people are looking at it through the prism of human rights. Health care is a human right. It's not a commodity. We don't want Wall Street health care. We want a human right-based health care. And there are localÂ—there's a Maryland health care human rights campaign. There'sÂ—Vermont has one. Oregon. They're in Washington. They're allÂ—coming up all over he country, 'cause people who are looking at how Obamacare is so far being implemented are seeing premiums rise, health-care use going down. They're seeing more problems and they're seeing what happened in Massachusetts. And so people who are aware are organized and getting more organized. So there's ways to get involved in this and reopen this debate.

JAY: And are thereÂ—given how paralyzed national national politics is on this issue, are there some local examples of where there are some other alternatives? I know inÂ—San Francisco, I believe, has essentially a single-payerÂ—.

ZEESE: They have a restaurant taxÂ—

FLOWERS: Right, a restaurant tax that pays for that. Yeah.

ZEESE: Â—that pays for health care for people in San Francisco. Vermont has pushed as far as you can, so far, toward a single-payer system. They have a number of steps to get there, but they have a good grassroots campaign that's continuing to push.

JAY: So there may be some initiatives at a municipal/state level that might make some breakthroughs here.

FLOWERS: Right.

ZEESE: But this needs to be a national solution. I mean, really you want to be able to travel throughout the United States and have health-care coverage.

JAY: Yeah. In San Francisco, you just leave the city and you've lost your coverage.

ZEESE: That's what I mean.

FLOWERS: Right. And also, you know, the thing that I often point out is that the United States is already spending more than enough for a universal, comprehensive, high-quality health-care system. We spend two and a half times what the average OECD nation, you know, industrialized nation spends per person on health care. So we have the money to do this and we have the resources to do this, and it's really just up to us to demand that we have the kind of health-care system that we need. And you can't get the costÂ—that was my point was that you can't get the real cost savings unless you do this at a national level.

ZEESE: What I was laughing about was I was thinking about Congress [incompr.] all this craziness about deficit. Health care's 18Â percent of our GDP and going up, and you're not going to solve the deficit for the long term without solving health care.

And that's not Medicare that's the problem. That's not Medicaid. The problem is the big part of the system, which is the market-based system.

Paul Ryan, in his idiocy, pushing toward privatization of Medicare, why he thinks having an insurance company making profit off of elderly people in their health care is going to lower costs is just absurd. It makes no sense. But that's the state of the Congress.

And, you know, Obama's even talking about reforms of Medicare that'll make it weaker, in my view. He's done some good things [crosstalk] Medicare Advantage. It was a good move. That's aÂ—Medicare Advantage is a nice name for private insurance, which was ripping off elderly people is what it was really doing. It was not a good part of the elderly health care in our country. So he did some good things on challenging that.

But what we're seeing in Congress is no sensible discussion on this issue. We're seeing them push in the wrong direction toward more privatization, more cost, higher percentage of our GDP, and more deficit, and less health care for American people.

FLOWERS: But the answer is simple, and as long as the people understand what it is that we require and we don't settle for anything less,Â—

JAY: Which is Medicare for all.

FLOWERS: Â—which is Medicare for all, then we can push in that direction and do it.

JAY: Alright. Okay. Thanks for joining us, Margaret, Kevin.

FLOWERS: Thank you.

ZEESE: Thank you.

JAY: And thank you for joining us on The Real News Network.

End

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